Gap December sales fall 5%; shares tumble

ChelseyDulaney

Gap Inc. said its core sales fell 5% in December amid declines across all of its brands, as the retailer continues to struggle to turn itself around.

Shares of Gap tumbled 6.9% to $24.90 a share in after-hours trading. Gap's stock had risen 5.7% in trading Thursday as a number of retailers reported strong holiday results.

For the five-week period ended Jan. 2, Gap reported same-store sales declines across all of its brands. Banana Republic same-store sales fell 9% and Old Navy fell 7%. For its namesake brand, global sales fell 2%.

Same-store sales, which Gap defines as stores open for at least a year along with online sales, are a key metric for retailers, stripping out the effect of recently opened or closed stores.

The 5% decline in the metric was steeper than the 3.9% decline analysts polled by Retail Metrics had forecast.

Excluding currency effects, Gap said its overall sales were down 3%.

"As we bring the holiday season to a close, we look forward to delivering new Spring collections across our brands," said Financial Officer Sabrina Simmons in a news release.

Gap has been struggling to revamp its namesake brand. The company brought on new leadership, including former Banana Republic veteran Wendi Goldman, who had led the Pink line at Victoria's Secret. It has also been working through cost-cutting measures.

Gap's results come in contrast to the better-than-expected sales growth reported by several retailers this week for the holiday period. The full picture of the holiday season remains uncertain, however, as many large retailers--such as Wal-Mart Stores Inc. Target Corp. and Amazon.com Inc.--haven't broken out their holiday sales.

Retailers faced a number of obstacles going into the key season. Customer traffic fell at many stores and malls, as more sales moved online. Also, shoppers continued to search for discounts, forcing retailers to offer promotions and potentially face lower profits.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.